An in-depth Bitcoin (BTC) mining analysis from CoinShares Research reveals that 54% of the global Bitcoin (BTC) mining hash rate is located in a single Chinese province, Sichuan and that this is mostly from only seven major mining farms. This seems like an unacceptable level of centralization for Bitcoin (BTC) and begs the question: Can the Chinese government cripple the Bitcoin (BTC) network at a time of their choosing? The answer is yes, as detailed in this article.
There are at least a couple of factors that explain why Sichuan is such a Bitcoin (BTC) mining powerhouse. According to CoinShares Research, the lion’s share of new mining technology is deployed in China since the biggest mining manufacturers, Bitmain and Canaan, are located in China. This gives Chinese mining farms preferential and discounted access to top of the line mining technology.
The second factor is that China has a glut of hydropower in Sichuan province, due to the Yangtze, Yalong, Dadu, and Min rivers which cut across the majority of the province. Hydroelectric dams are generating so much power in Sichuan that it would be wasted if it wasn’t for Bitcoin (BTC) mining farms buying up excess power.
As if these factors were not favorable enough, there are apparently calls for Sichuan to subsidize the Bitcoin (BTC) mining industry to increase its hold on global dominance. That being said, China has technically subsidized Bitcoin (BTC) mining for years with extremely cheap electricity from hydropower since China could build transmission lines to more evenly spread out the electricity but instead chooses to let mining farms have all of the excess power.
Further, Sichuan is not the only region in China that has the potential to become a Bitcoin (BTC) mining powerhouse. Neighboring Yunnan province has just as much hydropower potential as Sichuan, with the Yangtze, Honghe, Salween, and Mekong rivers crossing through the province. Xinjiang and Inner Mongolia have significant mining…